Your company is in the business of manufacturing cowboy boots. You sell the boots directly to customers
Fantastic news! We've Found the answer you've been seeking!
Question:
- Your company is in the business of manufacturing cowboy boots. You sell the boots directly to customers online, and sales have been increasing steadily over the past five years. While doing some standard financial ratio analysis, you see that your gross profit margin (gross profit* / sales) has been steadily declining over that same five-year period. Upon further investigation, you find that the industry average for gross profit margin among cowboy boot manufacturers has been holding relatively equal for the past five years.
- What does this set of facts tell you about your company's operations during that period?
- What are some possible explanations for your firm's performance, given that the industry averages differ from yours? *gross profit = sales - cost of goods sold?
Related Book For
Auditing An International Approach
ISBN: 978-0071051415
6th edition
Authors: Wally J. Smieliauskas, Kathryn Bewley
Posted Date: